Trade worries take their toll on Asian shares

US equity futures were pointing to weakness on Wall Street when trading resumes Friday. S&P E-mini futures were down 0.27% at 2,641.75.

On Thursday, stock markets in Europe were hit by disappointing earnings on further signs that corporate profit growth is peaking globally.

Those earnings underscored the lingering anxiety among equity investors as trade tensions, slowing global investment and growth kept stock markets on the back foot after a torrid October. A draft deal between Britain and the EU on future relations reached late Thursday did little to lighten the mood.

In the currency market, the pound was flat, buying $1.2878 after rising more than 1% on Thursday on news of the draft agreement between Britain and the EU, which describes a close post-Brexit relationship. The agreement follows a draft treaty last week that set the terms for Britain’s departure from the EU in March.

But the deal faces a rocky ride once it reaches a deeply divided British parliament containing hardline eurosceptic and staunch pro-EU factions, and various shades of grey in-between.

Indeed, analysts at National Australia Bank cautioned against early celebrations.

“After EU leaders are expected to rubber stamp this political declaration alongside the withdrawal agreement at a summit on Sunday, the ‘meaningful vote’ in the UK Parliament is likely in the second week in December. It would be far too optimistic to declare victory on a deal yet,” they said in a note to clients.

The euro edged up to $1.1414, despite statements by Italy’s leaders that they would press ahead with expanding the country’s deficit next year and resist pressure from EU authorities to trim its budget, as investors focus on conciliatory rather than confrontational comments.

The dollar was unchanged against the yen at ¥112.93.

In commodities markets, US crude oil prices extended their recent slump as US inventories hit their highest level since December, adding to concerns about a global crude glut.

US crude was trading down 2.4% to $53.33 a barrel, as of 3.51am GMT, after hitting a low $53.82 a barrel earlier in the session. Brent crude gave up 1% to $62 a barrel.

Spot gold was 0.1% more precious at $1,228.02/oz.

Reuters